Research On Overseas M&A Risk Of Listed Companies In The Semiconductor Industry

With the rapid development of high-tech industries such as communications,security,and aerospace in China,the problem of chip technology "stuck" in the downstream semiconductor industry has become more and more serious.The semiconductor industry is a basic and strategic industry for scientific and technological development.Whether it can achieve self-controllability has become an urgent problem to be solved in the process of promoting the further development of Chinese science and technology.To this end,the country has successively issued a series of policies and measures to incorporate the semiconductor industry into the national strategic emerging industry development plan,but the development of the semiconductor industry cannot be achieved overnight.The cycle spans the times,which also makes the road of my country’s independent research and development of semiconductors inevitably difficult and long.In this context,more and more Chinese-funded enterprises in the semiconductor industry have chosen to acquire advanced technologies through overseas mergers and acquisitions,thereby realizing the rapid development of my country’s semiconductor industry.For example,JCET Group and Tongfu Microelectronics have both rapidly grown into global semiconductor companies through overseas acquisitions to become leaders in the packaging and testing industry.However,overseas mergers and acquisitions are not a smooth road,and the process is full of crises.Although JCET Group has achieved scale expansion,it is also facing long-term losses after mergers and acquisitions.Therefore,paying attention to the risks and countermeasures of overseas mergers and acquisitions in the semiconductor industry is of great significance to help the healthy development of the semiconductor industry.Will Semiconductor Co.,Ltd.successfully completed the acquisition of Omni Vision in2019,achieving the same performance and stock price,becoming the second largest A-share chip design company with a market value of over 200 billion yuan today.On the whole,the acquisition of Omni Vision by Will shares is relatively successful,its risk management and control effect is good,and the expected synergy effect has been achieved.Therefore,this article takes the overseas merger and acquisition of Howe Technology by Weir Co.,Ltd.as an example to study the risks and countermeasures in the merger and acquisition process,and provide relevant references for overseas mergers and acquisitions of the domestic semiconductor industry,and help the rapid development of the semiconductor industry.This article is divided into three aspects: valuation pricing,financing payment,and integration to analyze the merger and acquisition risk of Will’s overseas acquisition of Omni Vision,and evaluate the risk response effect.In terms of valuation and pricing risk,because the target company is overseas,information asymmetry can easily lead to the risk of target selection and the difficulty in choosing valuation methods.At the same time,the valuation premium rate is high this time,and there is a risk of goodwill impairment.For the above-mentioned risks,Will has responded to the above-mentioned risks through sufficient investigation and understanding,prudent evaluation work and reasonable performance commitments,and has achieved good results.In terms of financing payment risk,under the condition that the scale of liabilities is increasing and the refinancing ability is insufficient,Will completed the merger and acquisition by adopting the mixed payment method mainly based on share payment,which relieved the financial pressure and reduced the financial risk.In terms of integration risks,Will has taken practical measures based on the business characteristics of both parties to the merger and acquisition to reduce the unique risks of industry operations and overseas business risks during the integration process,and maintain the stability of the personnel structure through multiple equity incentives,promoting the Improvement of the company’s R&D capabilities.By summarizing the successful experience and insufficiency of Will shares in this merger and acquisition case,this paper finally puts forward corresponding suggestions for improving the risk management of overseas mergers and acquisitions of listed companies in China’s semiconductor industry.